The POWER Act: What Changed for Philadelphia Employers

The short answer

The POWER Act, signed May 27, 2025 and effective immediately, changed how Philadelphia enforces its worker protection laws. It presumes retaliation for an adverse action within 90 days of a complaint or other protected activity you know about, presumes a violation if you cannot produce records, extends recordkeeping to three years, creates a public "bad actors" list for repeat violators and employers that ignore final orders, and writes into law the Office of Worker Protections' power to investigate without a complaint. Final enforcement regulations followed in 2026. If you have Philadelphia employees, your records and your posting practices need to match the new standard now.

What the POWER Act is and what laws it covers

The POWER Act stands for Protect Our Workers, Enforce Rights Act. Philadelphia City Council passed it and the Mayor signed it on May 27, 2025. It took effect immediately, with no grace period.

For most employers, the law did not create a new benefit or a new leave. Instead, it changed how the City enforces the worker protection laws it already had. Think of it as an enforcement upgrade layered on top of rules like paid sick leave and the wage theft ordinance. The exceptions are domestic workers, whose contract, break, leave, and severance rules were expanded, and tipped workers, who got a new sick pay rate.

The POWER Act amended three City laws: paid sick leave (Chapter 9-4100), wage theft (Chapter 9-4300), and domestic worker protections (Chapter 9-4500). It also added two new chapters to the Philadelphia Code: Chapter 9-6500, which deals with retaliation, and Chapter 9-6600, which sets enforcement rules. Those two new chapters also apply to the Fair Workweek law (Chapter 9-4600) and the law against wrongful discharge from parking jobs (Chapter 9-4700). Retaliation means punishing an employee for asserting a legal right, such as filing a complaint or asking about sick time.

The City agency in charge is the Office of Worker Protections, or OWP. It is part of the City’s Department of Labor, which issued the enforcement regulations. The City’s POWER Act page has the law and the OWP’s employer memo. The regulations are on the Department of Labor’s regulations page, and the notice posters are on the City’s worker protection resources page.

If you have even one employee covered by a Philadelphia worker protection law, this applies to you. There is no headcount threshold.

The 90-day retaliation presumption and the “clear and convincing” standard

This is the change most likely to affect a small employer. Under new Chapter 9-6500, if you know an employee filed a complaint or exercised a protected right, and you take an adverse action against that employee or a family member within 90 days, the law presumes you retaliated.

An adverse action is anything that hurts the employee: firing, cutting hours, demoting, moving them to a worse shift, or writing them up. The presumption means the City starts from the position that the action was retaliation.

You can rebut the presumption, but the bar is high. You have to show by clear and convincing evidence that you would have taken the same action anyway, and you must have documented the incident behind the action in writing. Clear and convincing is a stricter standard than the usual “more likely than not” test in civil cases.

In practice, this means your documentation has to exist before the complaint, not after. If an employee was already on a written performance plan, that plan is your evidence. If the only record of a problem was created after the complaint, you will struggle.

For small companies, the safest habit is simple. Document performance problems as they happen, in writing, dated, and shared with the employee.

Recordkeeping: three years, what to keep, and the presumption if you cannot produce it

Before the POWER Act, Philadelphia required employers to keep records for two years. The law extended that to three years.

What do you have to keep? The core set is hours worked with dates, sick leave accrued, sick leave used, and sick leave paid. Keep it for every employee covered by a City worker protection law.

The bigger risk is what happens if you do not have the records. If the OWP asks and you cannot produce them within 30 days, or your records are inconsistent, the law presumes you violated the underlying ordinance. Once again, the burden shifts to you.

The City’s OWP employer memo dated August 19, 2025 walks through the recordkeeping expectations in plain terms. It is short and worth reading in full.

Most payroll systems already store hours and pay. The common gaps are sick leave accrual by hour and a tag showing which hours were worked inside Philadelphia. Fix those two and you are most of the way there.

The Bad Actors Database

The POWER Act created a public list of employers that break the City’s worker protection laws. The ordinance calls it the Bad Actors Database.

An employer lands on the list in any of three ways. It has three or more final violations from separate incidents. It fails to comply with a final order by the deadline. Or it has a new final violation after being taken off the list. A violation is final once all appeals are used up. One violation that you fix on time does not put you on the list. One that you ignore can.

Being on the list has consequences beyond reputation. The OWP can refer listed employers for revocation of City licenses and City contracts. If your business holds a City license or sells to the City, that is a real risk.

The lesson for a small employer is to fix problems quickly when they come up. The database is aimed at employers who ignore findings or keep breaking the rules.

New powers for the Office of Worker Protections

The POWER Act wrote the OWP’s enforcement tools into the City code and added new ones.

First, the OWP can open an investigation on its own, without an employee complaint. City regulations have allowed this since 2023, and the POWER Act put it in the code. The OWP needs a reason to believe a violation has happened or will happen, or signs that violations are likely in a business or type of business.

Second, once an investigation is open, the OWP can broaden the scope. If one worker’s complaint suggests that other workers were affected, or points to a pattern, the OWP can expand the investigation to cover all workers at your business.

Third, the OWP can subpoena records and testimony. A subpoena is a legal order to produce documents or appear and answer questions. Ignoring it is not an option.

Fourth, the OWP can coordinate with other City departments, including Licenses and Inspections and Procurement. That coordination is what makes the license and contract referrals from the Bad Actors Database work.

Ogletree’s overview of the POWER Act highlights the OWP’s power to start investigations without any formal complaint. The City describes its enforcement as mostly complaint-based, but keep your records as if an investigation could start without one.

Private right of action and the 15-day cure notice

The POWER Act also lets employees sue you directly. This is called a private right of action, meaning the employee does not have to wait for the City to act.

Under the paid sick leave and wage theft laws, the employee must first send you a written notice and give you 15 days to cure the problem. Cure means fix it: pay what is owed or restore the leave. The 15-day notice does not apply to claims of willful misconduct or retaliation.

If you fix the problem within those 15 days, that may head off a lawsuit on that issue. The ordinance requires the notice and the 15 days, but it does not say a cure ends the claim. If you do not fix the problem, the employee can file. The limitations period is three years, so claims can reach back a long way.

Treat any written complaint from an employee as a possible cure notice. Read it the day it arrives, involve your advisor, and respond in writing within the window. Do not let a letter sit in an inbox.

The 2026 enforcement regulations

The ordinance told the Department of Labor to write regulations. The department filed updated proposed regulations on April 15, 2026 and posted them for public review. No one asked for a public hearing on the enforcement regulations, so under the City’s rules they took effect when the 30-day review period ended in mid-May 2026. The City posted the final text, which it calls the “Enforcement Regulations,” on June 5, 2026.

The final regulations spell out three duties that matter day to day.

The notice poster. For each City worker protection law that covers your workers, you must give employees the OWP notice poster or post it where they work. It must be in English and in any language that is the preferred spoken language of 5 percent or more of your workforce. The posters are on the City’s worker protection resources page.

Contemporaneous records. The three-year records must be contemporaneous, meaning created at the time the work happened, not reconstructed later. A spreadsheet built the week before an audit will not meet this standard.

Litigation holds. Once you get notice that a complaint has been filed with the OWP or in court, you must keep all records related to the complaint, including texts and emails, until the case and any appeal are over. A litigation hold is an instruction to stop deleting anything connected to the matter, including emails, texts, schedules, and time records. The regulation does not say the hold must be in writing, but putting it in writing and sending it to everyone who touches those records is the safest way to comply.

Penalties

The POWER Act sets the penalty amounts in the ordinance itself. Under the paid sick leave, wage theft, domestic worker, and retaliation laws, the OWP may seek a civil penalty of $2,000 for each violation, paid to the City. A notice or posting violation can cost up to $2,000 per violation. Workers can also get liquidated damages, which is extra money on top of what they are owed.

Remember that penalties stack with the other consequences. A recordkeeping gap can trigger a presumption of violation. A pattern of violations can put you on the Bad Actors Database. The database can cost you a license or a contract. The penalty amount is only one piece.

What to do this month

You do not need a law firm to get the basics right. Work through these steps in order.

Download and post the OWP notices. Get the poster for each City law that covers your workers from the City’s worker protection resources page. Post it, or give it to each employee, in English and in every language spoken by 5 percent or more of your staff.
Extend your records retention to three years. Update the policy, then check that your payroll and time systems are not purging data at two years.
Audit what you keep. Confirm you have hours worked with dates, sick leave accrued, sick leave used, and sick leave paid for every Philadelphia employee.
Tag hours by location. If any employee works partly in the city and partly elsewhere, make sure the record shows which hours were in Philadelphia.
Build a 90-day check into your discipline process. Before any adverse action, ask whether the employee filed a complaint or raised a rights issue in the past 90 days. If yes, stop and get advice.
Document performance in real time. Dated, written, shared with the employee. This is your clear and convincing evidence if you ever need it.
Write a cure notice procedure. Decide who receives employee complaints, who reviews them, and how you respond in writing within 15 days.
Write a litigation hold procedure. Decide who issues the hold, who receives it, and what systems it covers.
Review your other Philadelphia rules. The POWER Act raises the stakes for every City ordinance. Check your paid sick leave setup and your Ban the Box practices, which changed at the start of 2026.

Checklist

OWP notice poster for each City law that covers your workers posted or handed out in English and in each language spoken by 5 percent or more of the workforce.
Records retention policy updated from two years to three years.
Payroll and time systems set so nothing purges before three years.
Records include hours worked with dates, sick leave accrued, used, and paid, for every Philadelphia employee.
Hours tagged by work location for employees who split time.
Records are created at the time of work, not reconstructed later.
Discipline process includes a 90-day lookback for complaints or protected activity.
Performance issues documented in writing as they happen.
Written procedure for receiving and answering an employee cure notice within 15 days.
Written litigation hold procedure that triggers when you get notice of a complaint.
Someone assigned to check the City’s POWER Act, Department of Labor regulations, and worker protection resources pages for updates.
Penalty exposure understood: $2,000 per violation paid to the City, plus liquidated damages to the worker.